Is My Military Income Taxable to Idaho?

Whether your military income is taxable to Idaho depends on your state of residency (domicile) and where you're stationed during the year.

Under the Servicemembers Civil Relief Act (SCRA), military personnel generally don't gain or lose residency solely because they're stationed in a state due to military orders. A qualified service member isn't considered an Idaho resident simply because they're assigned to duty in Idaho.

Qualified service members include:

• Members of the Army, Air Force, Navy, Marine Corps, Coast Guard, and Space Force on active duty.
• Members of the National Guard called into federal service for more than 30 consecutive days in response to a national emergency.
• Members of the commissioned corps of the Public Health Service.
• Members of the commissioned corps of the National Oceanic and Atmospheric Administration (NOAA). 

Idaho Resident Stationed in Idaho

If Idaho is your home of record and you're stationed in Idaho, all of your income is generally taxable to Idaho, including:

• Active-duty military pay
• Wages from civilian employment
• Interest, dividends, and other income regardless of where it was earned

You generally file Idaho resident Form 40.

Idaho Resident Stationed Outside Idaho

If Idaho is your state of residence and you're stationed outside Idaho on active duty, you must still report all income on your Idaho return. However, Idaho allows a subtraction for certain active-duty military pay earned outside Idaho. The military pay qualifies if:

• You served on active duty for 120 consecutive days or more, and
• The military service was performed outside Idaho.

Idaho specifically allows a subtraction for qualifying active-duty military wages earned outside Idaho. Don't include military wages earned while stationed in Idaho in this subtraction.

If your spouse is also an Idaho resident, file Form 40. If your spouse is a nonresident, part-year resident, or military nonresident, file Form 43 and select Idaho Resident on Active Military Duty as your residency status. 

Nonresident Stationed in Idaho

If your military home of record isn't Idaho and you're stationed in Idaho under military orders:

• Idaho doesn't tax your active-duty military pay.
• Idaho may tax nonmilitary Idaho-source income, such as civilian wages earned in Idaho or Idaho business income.

The Idaho instructions provide that nonresidents shouldn't include military wages earned while stationed in Idaho.

If you're required to file, you'll generally use Form 43.

National Guard Members Serving in a Combat Zone

Idaho follows federal combat-zone tax relief provisions.

If you're serving in a combat zone:

• Tax filing deadlines are extended for at least 180 days after service in the combat zone ends.
• Penalties and interest generally aren't charged during the qualifying period.
• Combat-zone military pay may be excluded from taxable income under federal rules.
• Business tax returns, employment taxes, and sales/use taxes aren't covered by these combat-zone provisions.
• Write "COMBAT ZONE" and your combat-zone departure date at the top of the return.

Program Entry

To enter the Idaho subtraction for qualifying active-duty military pay earned outside Idaho:

1. Select State from the left-side menu.
2. Click the three dots (...) next to Idaho and select Edit.
3. Select Deductions from Income.
4. Select Active Duty Military Pay Earned Outside of Idaho.